Mike Ashley’s Frasers makes bid to buy struggling Mulberry

Frasers has made a bid to buy luxury brand Mulberry, valuing it at £83m after the group went to investors to raise cash last week.

Mulberry fell to a £22.6m loss in the year to the end of March as the handbag brand suffered a broader slowdown in luxury spending.

This prompted bosses to seek an equity fundraising worth more than £10m on Friday as they warned of concerns over the company’s future as a going concern.

Mike Ashley’s retail empire, which already owns a 37 percent stake in Mulberry, said on Monday it had been surprised by the capital raise and would have been willing to take up the subscription in full, potentially on better terms.

Frasers said the decision had created a status quo that put Frasers and other minority shareholders in an “untenable position” when it launched a 130 pence per share bid for Mulberry.

The offer, which has not yet been recognized by Mulberry’s board, represents a 30 per cent premium to Friday’s subscription price and values ​​the remaining stake in the business it does not currently own at £52.4 million.

However, the offer is conditional on the withdrawal of the subscription offer.

“Frasers will not accept another situation at Debenhams where a perfectly viable business is run,” the group added, referring to its £150m investment in the defunct high street giant before it collapsed in 2021.

‘We have been supporting the brand and the commercial opportunities available to the company for a long time.

“With our leading retail presence and experience, and best-in-class distribution capabilities, we believe Frasers is the best steward to return Mulberry to profitability.”

Mulberry shares rose 8.9 per cent to 128 pence in early afternoon trading. They are down almost 40 percent in the last 12 months and more than 50 percent in the last five years.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “It has been very difficult for Mulberry as, like Burberry, it relies more on aspirational buyers than the powerful names on the rails at LVMH.

‘There were hopes that the change at the top, with the arrival of new CEO Andrea Baldo, formerly of Danish fashion brand Ganni, would help give the company a new direction.

“But as I unpacked and sought to establish a new chapter for the company, it became clear that the current financial situation is unsustainable without further funding.

“Mulberry, with its proud Somerset heritage, may be very reluctant to become part of the Fraser Street wardrobe, but at least it would keep the brand alive.”